Breaking: Universal Tariff Settled at 15%.

• Donald Trump (U.S. President) revealed on Truth Social. In exchange for lowering the universal tariff from 25% to 15%, South Korea agreed to invest $350 billion in the U.S.
• It was agreed to purchase $10 billion worth of energy products like LNG. It’s unclear if this is included in the $350 billion.
• He added, “Lee Jae-myung (President) plans to visit the White House within two weeks for an official announcement,” and congratulated him on his election.
• No mention of tariffs on items like automobiles.
• (Released at 7:13 AM Korean time. We’ll prepare a separate report on follow-up situations. Editor’s note.)
• Below is the full post from Trump.
• “I am pleased to announce that the United States has reached a complete and comprehensive trade agreement with South Korea. Under this agreement, South Korea will provide $350 billion to U.S.-owned and controlled investment projects, which I, as President, will personally select. Additionally, South Korea will purchase $100 billion worth of LNG or other energy products, and further, South Korea has agreed to invest large sums for investment purposes. This amount will be announced when South Korean President Lee Jae-myung visits the White House for bilateral talks within the next two weeks. I congratulate the new president on his election victory. Furthermore, South Korea will be fully open to trade with the U.S., accepting American products including cars, trucks, and agricultural goods. We have agreed on a 15% tariff rate for South Korea. The U.S. will not impose tariffs. Thank you to the trade representatives who attended today. It was a great honor to discuss their nation’s great success!”
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“Make the Best Offer,” U.S. Pressure.

• According to the Wall Street Journal, Howard Lutnick (U.S. Secretary of Commerce) pressured Kim Jeong-gwan (Minister of Trade, Industry and Energy) to “bring everything to the table.”
• The South Korean government’s goal was to lower the general tariff from 25% to 15% and align auto tariffs with those of Japan and the EU.
• A high-ranking government official, interviewed by the Kukmin Ilbo, remarked, “This is the first time we’ve faced such a one-sided negotiation,” adding, “It makes us question if we are truly allies.”
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$200 Billion vs. $400 Billion.

• The key was the scale of investment. South Korea came with a $200 billion investment package, but the U.S. started at $400 billion.
• Lee Jae-min (Professor at Seoul National University) remarked, “Large-scale investment is like riding a tiger,” predicting, “To avoid being devoured, you have no choice but to hold on tight and run.”
• Related Link.

US-China Tariff Talks Extended by 90 Days.

• Donald Trump remarked that the meeting with China went “very well.” China also decided to defer retaliatory tariffs.
• Many observe that both sides opted for maintaining the status quo over extreme conflict.
• China played the rare earth export control card. China was the toughest opponent for Trump to back down from.
• Talks with India did not go well. A 25% tariff will be imposed starting August 1. The Indian government maintains its stance on continuing further negotiations.
• Related Link.

Ring of Fire Roars: Magnitude 8.8 Quake.

• A magnitude 8.8 earthquake struck off the east coast of Russia’s Kamchatka Peninsula. It’s the strongest quake since the 2011 Great East Japan Earthquake.
• A tsunami up to 5 meters hit Sakhalin, Russia. On the opposite side of the ocean, Hawaii faced waves up to 1.74 meters high.

What Matters Now.

This Time, a Carrot: Easing Breach of Duty Punishments.

• There was significant discontent among executives due to amendments to the Commercial Act and corporate tax hikes. Lee Jae-myung (President) stated, “To prevent excessive economic penalties from stifling business activities, we will launch a task force to rationalize economic punishments.”

Financial Services Commission Dissolved, Absorbed by Ministry of Economy and Finance.

• The outline of the organizational restructuring is out. The Ministry of Economy and Finance will separate its budget function to establish an independent Planning and Budget Office, while integrating the domestic financial functions of the Financial Services Commission into its structure.
• The Financial Services Commission is effectively on the path to dissolution. It will be restructured into the Financial Supervisory Commission, focusing on financial supervision and consumer protection. The Financial Consumer Protection Office will be spun off to create the Financial Consumer Protection Agency.

Concerns Over Yellow Envelope Act? “Request from KEF.”.

• The European Chamber of Commerce in Korea (ECCCK) expressed concerns over the Yellow Envelope Act, but it turns out this was at the request of the Korea Employers Federation (KEF).
• A European Chamber official stated, “The mention of withdrawing from the Korean market was an example of a worst-case scenario, but that part was emphasized.”
• The JoongAng Ilbo featured an article on its front page stating, “The American Chamber of Commerce in Korea also has concerns about the Yellow Envelope Act,” but there was no mention of withdrawal.
• The Kyunghyang Shinmun criticized it as “crossing the line.” In an editorial, it argued, “Europe guarantees workers’ rights more broadly than Korea, so talking about withdrawal here is a double standard.”
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Hundreds of Negotiations? A Bit of an Exaggeration.

• There are two main complaints about the Yellow Envelope Act. First, the concern of having to negotiate with hundreds of subcontractors all year round. Second, the criticism that it might grant immunity to illegal union activities.
• Both are inaccurate. The government is setting negotiation guidelines, and it doesn’t grant blanket immunity.
• The Hankyoreh countered in an editorial, stating, “The Yellow Envelope Act, which strengthens negotiation responsibilities, is expected to actually reduce labor disputes.”
• Related Link.

Deep Dive.

Hanwha Ocean’s Decision.

• They withdrew the 47 billion won damages lawsuit against subcontracted workers. The union also promised to prevent recurrence. There were concerns that withdrawing the lawsuit could be considered breach of trust, but the benefits of labor-management trust could be greater.
• The Korea Times evaluated, “Hanwha Ocean’s agreement to choose cooperation over catastrophe could set a significant example for other sites.”
• Related Link.

War on Industrial Accidents: Hansol Paper Raided.

• A worker fell to his death at this factory.
• The worker’s wife reported her husband missing when he didn’t return home. Phone tracking revealed he was inside the factory. CCTV footage showed him falling into a storage tank.
• Colleagues didn’t witness the accident and stated they thought he had left work early.
• Last year, 827 people died in industrial accidents. Among them, 278 fell, 80 were struck, 54 were crushed, and 52 were hit by falling structures.
• Related Link.

Labor Minister Visits Coupang.

• The logistics center felt like 35.8 degrees. Mandatory 20-minute breaks every two hours. Kim Young-hoon (Minister of Employment and Labor) urged more cooling and ventilation facilities. Plans to visit POSCO E&C tomorrow. Four industrial accident deaths occurred this year. Kim emphasized in an interview with Kyunghyang Shinmun, “Creating a safe workplace is the first duty, and broadly protecting labor outside rights is the second.” According to the Hankook Ilbo, the number of dispatched officials from the Ministry of Employment and Labor to the presidential office increased from two to eight. The aim is to strengthen labor policy.
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Yoon Seok-yeol’s Arrest Warrant Requested.

• The Kim Geon-hee special prosecutor summoned him twice, but he remains in prison. The special prosecutor attempted to bring him out from Seoul Detention Center twice, but failed. “Bring out” implies using force.
• If the warrant is issued, the special prosecutor can execute it.

Unification Church ‘Key Man’ Yoon Young-ho Arrested.

• The Kim Keon-hee special prosecutor views the Geonjin monk’s solicitation case as a national scandal.
• Yoon Young-ho (Unification Church Headquarters Director), suspected of soliciting Kim Keon-hee (Yoon Seok-youl’s wife) through Geonjin monk (Jeon Seong-bae), has been arrested.
• Yoon Young-ho has already admitted to giving bribes. He confessed that higher-ups in the Unification Church, including Han Hak-ja (Unification Church President), are involved, potentially widening the investigation’s scope.
• Related Link.

Democratic Party Convention D-2.

• Voting by party members has only taken place in Chungnam and Yeongnam. Due to flood damage, the rest will vote simultaneously on the 2nd of next month. The final results will be announced without any interim updates.
• So far, Jeong Cheong-rae (Democratic Party member) and Park Chan-dae (Democratic Party member) have recorded 63% and 37%, respectively.
• Delegates hold voting rights equivalent to 17 party member votes, so Park Chan-dae hasn’t given up hope for a last-minute golden cross. There are 1.11 million party members, with 900,000 eligible to vote. There are about 16,000 delegates.
• Related Link.

Another Take.

AI Powerhouse? The Reality is a Multi-tiered Labor-Intensive Industry.

• South Korea’s IT service exports stand at $9.5 billion (as of 2023). Package exports are only $1.3 billion. Korea has overly relied on service development rather than products.
• 84% of software companies have sales below 5 billion won. The growth rate of R&D investment is 0.5%. Only labor cost competition remains instead of innovation.
• Lee Su-hwa (Professor at Seoul National University) pointed out, “Despite calls for digital transformation, the labor-intensive industry structure remains mired in a multi-tiered subcontracting system with low-wage, low-skilled workers.” It’s time to shed the shadow of a dependent ‘subcontracting industry’ reliant on cheap labor and shift to a high-value-added industry.
• Related Link.

Punitive Fines for Major Accidents.

• President Lee Jae-myung instructed at a cabinet meeting that “criminal punishment has its limits” and emphasized the need for “substantial economic sanctions.” Follow-up measures are under discussion. Investigations and trials often take over two years, with many escaping through large law firms.
• Kwon Young-guk (Co-representative of the Serious Accident Expert Network) believes fines should not replace criminal punishment. He argued, “The enforcement of the Serious Accident Punishment Act must be normalized.”
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Asphalt Convention.

• Coined by the JoongAng Ilbo. Out of the eight candidates running for the Supreme Council at the People Power Party convention on the 22nd of next month, six opposed impeachment.
• Kim Min-soo (former People Power Party spokesperson) referred to deploying the military to the election commission as the “Gwacheon Landing Operation.”
• Kim So-yeon (lawyer) is known for claiming it was a “patriotic decision” and that “martial law is actually emergency enlightenment.”
• Kim Tae-woo (former Mayor of Gangseo District, Seoul) wrote that “the current situation is a systemic war, and we must not retreat.”
• Candidates for party leader include Kim Moon-soo (former Minister of Employment and Labor), Ahn Cheol-soo (People Power Party member), Cho Kyung-tae (People Power Party member), and Joo Jin-woo (People Power Party member).
• Related Link.

Survival by Distancing from Yoon.

• Recently, the tone of JoongAng, Chosun, and DongA newspapers has subtly diverged.
• Kim Jeong-ha (JoongAng Ilbo Editorial Writer) stated, “Having Kim Moon-soo as the representative is far from personnel renewal and leadership change,” emphasizing, “To capture the centrist vote, there must be an attempt to distance from Yoon Seok-yeol and shift policy leftward.”
• He also pointed out whether the People Power Party has already given up on next year’s local elections.
• “In Korean politics, conservatives have won when pursuing change and lost when complacent. This is a lesson the People Power Party, facing a tough road ahead, must not forget.”
• Meanwhile, Jeon Han-gil (former Korean history instructor) mentioned plans to send a questionnaire asking if they intend to follow the same path as Yoon Seok-yeol.
• DongA Ilbo, in an editorial, remarked, “Now they’re even interviewing Jeon Han-gil,” criticizing, “Being swayed by far-right YouTubers, they are choosing a path to ruin, yet there’s talk that they haven’t hit rock bottom despite record-low approval ratings.”
• Related Link.
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Was There an Order to Obstruct the Martial Law Repeal Vote?

• On the night of December 3, 18 People Power Party lawmakers participated in the vote.
• It is confirmed that Yoon Seok-yeol spoke with Choo Kyung-ho (then People Power Party floor leader) and Na Kyung-won (People Power Party lawmaker), but whether he ordered them to obstruct the vote remains unverified.
• Ahn Cheol-soo (People Power Party lawmaker) refused the special prosecutor’s request for a witness interview.
• Related Link.

Voice Phishing Losses Reach 854.5 Billion Won.

• Last year’s losses exceeded Japan’s 71.9 billion yen (673 billion won). The per capita loss in Korea is 16,500 won, three times Japan’s 5,400 won.
• There is an analysis suggesting that the steep rise in Korea’s losses is because voice phishing rings see Korea as an “easy target.”
• Crimes impersonating institutions like the prosecution, police, and Financial Supervisory Service account for over 60%.
• In Japan, the elderly over 70 are often targeted with the “It’s me, it’s me” scam, impersonating family or relatives. The analysis suggests vulnerability due to the difficulty of knowing personal phone numbers unless closely acquainted.
• Park Sang-jun (Professor at Waseda University) pointed out, “Japanese youth are less likely to fall for scams like investment fraud or overseas employment because they can secure regular jobs if they wish.”

The Fix.

30 Years of Pay-As-You-Throw: Time for a New Plan.

• 160 million tons of household waste reduced, 200 million tons recycled. Economic impact reaches 45 trillion won.
• Hong Su-yeol (Director, Resource Circulation Society Economic Research Institute) emphasized, “This year must be the first year of the circular economy.”
• First, clear reduction and reuse targets are needed.
• Second, we must strengthen bans on disposable products, the deposit system for disposable cups, and incentives for reusable containers.
• Third, we need to improve the quantity and quality of recycling. A deposit system for PET bottles could be introduced. A triple net of deposit systems, separate collection, and pay-as-you-throw bag sorting is necessary.
• Related Link.

Confidence in Tax Increases Needed.

• Everyone dislikes taxes. It’s due to the distrust that taxes aren’t being used properly.
• Oh Gun-ho (Chairman of ‘Welfare State We Create’) emphasized, “If people believe taxes are being used well, support for tax increases can rise.” Whenever pushing for tax hikes, it’s crucial to clearly state where the additional revenue will be spent.
• Raising corporate taxes could be justified by plans to stabilize employment for precarious workers or support finance for ordinary citizens. Increasing comprehensive real estate taxes could be pitched as funding for regional public rental housing.
• A social welfare tax could be introduced as a purpose tax like the education tax, or a certain percentage of direct taxes like corporate and income taxes could be allocated. Inheritance and gift taxes could be used as social inheritance funds to support young people’s life starts.
• We’ve never had a proper debate on tax increases. Oh Gun-ho pointed out, “Productive debates generate the energy for innovation.” Tax increases should be approached confidently and transparently.
• Related Link.

Highest CO2 Levels in 800,000 Years.

• The Mauna Loa Observatory in Hawaii has been measuring CO2 levels since 1958, but it might close next year due to Trump’s budget cuts.
• Levels soared from 315 ppm in 1958 to 430 ppm this June.
• Analysis of Antarctic ice data shows CO2 levels never exceeded 300 ppm in the past 800,000 years.
• Ko Jae-hyun (Professor at Hallym University) warns, “Greenhouse gases are not just our generation’s issue; they directly affect the fate of future descendants on Earth,” adding that “the steeply rising Keeling Curve is ticking towards midnight.”

88,394 Reports of Dating Violence.

• Compared to five years ago, the number has doubled. Arrests stand at 14,900 cases.
• The Segye Ilbo analyzed, “Early response to dating violence is crucial, but legislative gaps pose significant challenges.” 80% of repeat incidents occur within a month of the initial offense. The more offenses, the shorter the time to reoffend.
• Several bills have been proposed, but definitions of relationships remain vague, and no actual surveys have been conducted.
• A National Police Agency official stated, “Dating violence often repeats, but there is no legal basis to prevent the perpetrator’s approach or enforce mutual separation in romantic relationships.”
• Related Link.

Why Ask Victims What to Do with Perpetrators?

• The Stalking Punishment Act is not a crime subject to victim’s consent. It changed two years ago. This means punishment is enforced once the crime is confirmed, regardless of the victim’s wishes.
• According to Hankyoreh, authorities still frequently ask victims for their opinion. This is attributed to a lack of expertise and objective criteria in investigative agencies.
• Bae Sang-hoon (Crime Analyst) pointed out, “Stalking crimes naturally lead to victims changing their minds due to their relationship with the perpetrator,” adding, “It’s inappropriate to ask victims what should be done with the perpetrator.”
• Last year, there were 887 temporary measures like restraining orders for victims, with only 499 resulting in detention.

ICYMI.

You Can Drink Beer When Thirsty.

• There’s no need to drink only water for hydration. A study comparing the hydration effects of 13 beverages found milk, cola, coffee, orange juice, and sports drinks all equally effective.
• Milk actually retained body hydration longer.
• Naturally, beer also hydrates. However, its diuretic effect was 12% higher than non-alcoholic drinks.
• Jung Jae-hoon (Food Writer) emphasized, “It’s more important how much you drink than what you drink.”
• Related Link.
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“No Discussion on Pardoning Cho Kuk.”.

• The presidential office remains cautious. Pro-Moon lawmakers like Ko Min-jung (Democratic Party lawmaker) continue to apply pressure. She wrote, “We want to confirm that we were not wrong in demanding prosecutorial reform.” Han Byung-do (Democratic Party lawmaker) also argued it was “a prime example of excessive prosecutorial power.” Woo Sang-ho (Senior Presidential Secretary for Political Affairs) stated, “We have not yet considered pardoning politicians.”

Worth Reading.

The Uprising Isn’t Over Yet.

• Yoon Seok-yeol refuses both the special investigation and court appearances. He even claims to be a “victim of political oppression.”
• Cho Hong-min (Kyunghyang Shinmun Editorial Writer) remarked, “The ‘fall of Yoon Seok-yeol’ paradoxically proves our society’s resilience in restoring democracy.”
• “Barbarism doesn’t arrive in an instant. It seeps into daily life when incompetence is tolerated, ineptitude is ignored, and lawlessness is repeated. We must remember this time of chaos and suffering and reflect to avoid repeating the same mistakes. Barbarism can reveal its ugly face anytime, anywhere.”

President’s YouTube Addiction.

• It’s well-known that Yoon Suk-yeol is addicted to YouTube. Lee Bong-kyu (Lee Bong-kyu TV operator) even said, “He watches my broadcast even while sleeping,” and Yoon himself advised, “Look for well-organized information on YouTube.”
• Lee Young-tae (Korea Daily editorial writer) also sees Lee Jae-myung’s YouTube bias as dangerous. He pointed out, “Rumors are rampant that Kim Eo-jun is the real power behind the throne, and that ‘Eo-shim’ is stronger than ‘Myung-shim’ in party elections.”
• There’s talk that Kang Sun-woo (former Minister of Gender Equality and Family candidate) couldn’t be let go until the end due to the influence of the News Factory.
• “Kim Eo-jun’s power comes from Lee Jae-myung, who looks only to Kim Eo-jun (or appears to do so). The only one who can sever this is Lee Jae-myung.”
• Related Link.

‘Social Consensus’ as an Alibi.

• No-Ran Bong-Tu Law was once delayed under the guise of social consensus. Proposed in 2015, it couldn’t even pass the committee stage when the Democratic Party held the majority in the 20th National Assembly. But public opinion has shifted, and now the time is ripe.
• What about the Anti-Discrimination Law?
• “The phrase ‘social consensus is needed’ in ‘political dialect’ means there’s no ‘practical certainty’ that it will help win votes or at least not cause harm in elections.”
• Lee Se-young (Hankyoreh Politics Editor) emphasized that politics is about persuading and changing public opinion, not waiting for the right time.
• “What is needed now is to transform the judgment based on conscience and common sense that ‘discrimination should be eliminated’ into a ‘collective certainty’ that eliminating discrimination won’t harm me (or us). That’s the job of politics.”
• Related Link.

Trump’s Imperial Play, Likely to End Poorly.

• Trump said he admired William McKinley (former President). He was the original tariff warrior of the 1890s and an economic nationalist with imperialist tendencies.
• Park Hyun (Hankyoreh Editorial Writer) summarized the differences between Trump and McKinley like this.
• 130 years ago, the U.S. was the world’s largest manufacturing power, but now its manufacturing is already in decline.
• McKinley boosted steel, but Trump failed to boost semiconductors.
• America’s strength was possible because allies depended on it. After all this chaos, will America’s authority continue? Park Hyun predicted, “Trump’s ambitious strategy may seem like a blessing to America in the short term, but in the medium to long term, it will return as a curse digging its own grave.”
• Related Link.